This action might not be possible to undo. Are you sure you want to continue?
A Historical Perspective An Interisle White Paper
Prepared by: Interisle Consulting Group, LLC 39 S Russell Street Boston, MA 02114 http://www.interisle.net Lyman Chapin +1 617 686 2527 email@example.com Chris Owens +1 617 413 3734 firstname.lastname@example.org
ISP Peering and Interconnection
About this Report
Studies of Internet Service Provider (ISP) interconnection arrangements have been performed from many different perspectives, including the technical architecture of exchange points, the business and economic models that underlie peering and transit agreements, and the interaction between market-driven interconnection arrangements and public policy (at both the national and international levels). These studies have been extensively reported and analyzed (see Sources and References). This report is intended to provide an historical context for, and concise summary of, the evolution of ISP interconnection—how it originated, how it developed, and how it is practiced today—without exhaustively reiterating information that is available from other sources. The goal of this report is to describe the way in which the self-organized and selfregulating structures that govern today’s global Internet—including the arrangements that enable ISPs to connect their networks to each other—have evolved naturally, over a period of roughly 35 years, according to principles that are deeply embedded in the Internet architecture. These structures are selforganized and self-regulating not because the Internet is an anachronistic “untamed and lawless wild west” environment, but because years of experience have shown that self-management is the most effective and efficient way to preserve and extend the uniquely valuable properties of the Internet. Following an introduction to ISP interconnection in section 1, section 2 of this report describes the way in which today’s model of ISP interconnection has evolved over the past 35 years in parallel with the evolution of the Internet architecture. Section 3 describes the economics and management structures that have emerged from that process to govern today’s Internet. Section 4 identifies new challenges that have emerged since the turn of the century to the traditional arguments for and against the regulation of ISP interconnection. Section 5 summarizes the conclusions of the report. Section 6 contains a list of sources and references.
Copyright © 2005 Interisle Consulting Group, LLC. All Rights Reserved
Beranek and Newman) developed the hardware and software for the first ARPAnet nodes installed in 1969. All Rights Reserved www. and international standards committees responsible for network and transport layer architecture. Beginning in 1989. co-founder and trustee of the Internet Society (ISOC). and protocol standards. the Special Interest Group on Data Communication of the Association for Computing Machinery (ACM SIGCOMM). Chapin has served as the chairman of the Internet Architecture Board (IAB). which became one of the first commercial Internet Service Providers (BBN Planet) in 1993. and U. Chapin has also served as a Director of the Internet Corporation for Assigned Names and Numbers (ICANN). representative to the networking panel of the NATO Science Committee. protocols. representative to the computer communications technical committee of the International Federation for Information Processing (IFIP TC6). He is a Fellow of the Institute of Electrical and Electronics Engineers (IEEE). Before co-founding Interisle Consulting Group. Copyright © 2005 Interisle Consulting Group.ISP Peering and Interconnection Page 2 About the Author Lyman Chapin has actively contributed to the development and evolution of the technologies and self-governance structures of what is now the Internet since 1977. Mr.S. BBN operated the NSFnet regional network NEARnet. and policy framework that support today’s globally pervasive Internet. standards area director for the Internet Engineering Steering Group (IESG). which (as Bolt. and was separately incorporated in 2000 as Genuity. LLC.S. Mr. service. He was a principal architect of the Open Systems Interconnection (OSI) reference model and protocols. Mr. U.interisle. and during almost three decades of international technical and diplomatic leadership has played a key role in the development of the network routing and interconnection architecture. acquired two other regional networks (BARRnet and SURAnet). Chapin was Chief Scientist at BBN Technologies. and is the co-author of Open Systems Networking—TCP/IP and OSI.S.net . and the U.
Copyright © 2005 Interisle Consulting Group. behind the scenes lie many individual networks. the nature of Internet interconnection agreements. The Digital Handshake: Connecting Internet Backbones (see Sources and References).interisle. and the number and variety of 1 In The Evolution of the U. End users see the seamless. around the block or around the world. The unregulated marketdriven model on which today’s global interconnection arrangements are based has developed over the past three decades in parallel with the development of the Internet itself. joined to each other by interconnection arrangements.S. As a result. despite the fact that no single network operator could possibly provide Internet access in every part of the world. Internet Peering Ecosystem (see Sources and References). ubiquitous communication medium known as the Internet.” 2 An excellent summary of the case that these studies collectively make for the unnecessity of ISP interconnection regulation is contained in FCC Office of Plans and Policy (now Office of Strategic Planning and Policy Analysis) Working Paper 32. Internet interconnection is fundamentally different from interconnection in the traditional. circuit-switched telephony world. the economics of interconnection. owned and operated by many different corporate. and governmental entities.net . for reasons that are intrinsic to the architecture of the Internet and how it has evolved. and studies by a wide variety of public and private organizations2 have repeatedly concluded that it represents the most effective and efficient way to provide ubiquitous public Internet connectivity without being either anti-competitive or inequitable. the range of choices that are available to participants. institutional. LLC. ISP Interconnection1 allows traffic originating at a source connected to one ISP’s network to reach a destination connected to another ISP’s network. Interconnection enables the Internet as a whole to be ubiquitously fullyconnected. Bill Norton coins the roughly equivalent term Internet Peering Ecosystem: “a community of loosely affiliated network operators that interact and interconnect their networks in various business relationships.ISP Peering and Interconnection Page 3 1 Introduction Internet Service Providers (ISPs) connect their networks to each other in order to exchange traffic between their customers and the customers of other ISPs. Interconnection is the glue that holds the Internet together. All Rights Reserved www. global.
“computer communication” meant connecting I/O and storage peripherals (such as card readers.S. there is an important distinction between internetworking.ISP Peering and Interconnection Page 4 participants in the market are different from their counterparts in the telephony world. and interconnection. LLC. Today internetworking.interisle.1 Networking Neither internetworking nor interconnection were features of the Internet’s most distant precursors. In the 1950s and 1960s. All Rights Reserved . at which two or more ISPs make technical and administrative arrangements to exchange traffic. and governmental organizations. 2. Department of Defense funded several projects to build homogeneous networks before Bob Taylor. The Information Processing Techniques Office (IPTO) of the Advanced Research Projects Agency (ARPA) of the U. which enables the owners and operators of different networks to collaborate as business entities in the provision of seamless end-to-end Internet connectivity to all of their individual customers. before LANs and PCs.” www. 2 The Origins of Interconnection As we observe it today.net Copyright © 2005 Interisle Consulting Group. which enables networks based on different telecommunication technologies and protocols to exchange data. Thus. is the common operating mode throughout the Internet. Early efforts to connect computers to each other led to “networks” based on a variety of different proprietary communications technology and protocols. ISP interconnection is not an intrinsic technical feature of the Internet. noncommercial. interconnection takes place at specific public and private exchange points. using the standard Internet Protocol3. and printers) to resolutely self-contained mainframe computers. terminals. who took 3 The standard Internet Protocol is the “IP” in the familiar acronym “TCP/IP. it is a management feature necessitated by the fact that the ownership and administration of the physical components of the Internet infrastructure are distributed among many different commercial.
and (e) automatic reconfiguration of routing tables after the loss of a link or node.net .ISP Peering and Interconnection Page 5 over as IPTO head in 1966. through 1970)5. and in Donald Davies’s work at the National Physical Laboratory in Teddington. but as the number of networks grew. and Binder. which originated in the multi-access channels of ALOHAnet at the University of Hawaii (by Abramson.2 Internetworking It is remarkable to realize that the very earliest thinking4 about what a “network of networks”—an “internet”—should be embraced the three key concepts that underlie the architecture of today’s global Internet: 1) The concept of packet switching. CA. 5 ALOHAnet was a radio network. All three concluded that the strongest communication system would be a distributed network of computers with (a) redundant links. UK. CA. in Leonard Kleinrock’s work at UCLA in Los Angeles. recruited Larry Roberts to design a “distributed communications network” which laid the foundation for the ARPAnet. 2) The concept of best-effort service. it was possible to exchange information between them by building a translator. culminating in the July 1968 ARPA request for proposals for the interconnection of four ARPA research sites into what would be called the ARPAnet. When there were just a few of these homogeneous networks. (d) variable routing of packets depending on the availability of links and nodes.interisle. the n-squared scaling inefficiency of pair-wise translation led to the idea of “internetworking”—creating a network of networks. it was Bob Metcalfe’s brilliant leap from ALOHA to Ethernet (at PARC in 1973) that brought the concept of stochastic (non-deterministic) channel access into the networking mainstream. (b) no central control. 2. Kuo. which originated in at least three distinct places during 1961-1965: in Paul Baran’s work at the RAND corporation in Santa Monica. All Rights Reserved www. (c) messages broken into equal-size packets. and the idea of contention for channels was widely familiar in the radio context. LLC. Copyright © 2005 Interisle Consulting Group. 4 In the early to mid-1960s.
and has carried through to the governance structures that oversee the Internet today—particularly the Internet Engineering Task Force (IETF). were being developed at the same time7. Initially the Packet Radio Network (Bob Kahn) and Packet Satellite Network (Larry Roberts). Defense Department contractors who were permitted to use it led other U.net . All Rights Reserved www. 2.ISP Peering and Interconnection Page 6 3) The concept of application independence—that the network should be adaptable to any purpose. and Transpac. later Cyclades (Louis Pouzin).” after the serial number of the BBN report that described it. PSS. Other packet networks. Datapac. the ARPAnet began using IP in 1977. The first papers describing “packet network interconnection” were published by Vint Cerf and Bob Kahn in 1973. rather than tailored specifically for a single application (as the public switched telephone network had been purpose-built for the single application of analog voice communication). based on other protocols.S. whether foreseen or unforeseen. installing.S.3 Interconnection The clearly evident usefulness of the ARPAnet to the U.25-based networks that became Telenet. the ARPAnet was not an “internet”—each of its four computer hosts was connected to an Interface Message Processor (IMP) by a proprietary serial link and protocol6. LLC. The tradition of self-management by the people designing. and operating the network was established at the very first NWG meeting. and the X. lines leased from the telephone company.interisle. in 1969. From the beginning the ARPAnet was managed by an informal and mostly selfselected group of engineers and managers who began meeting as the Network Working Group (NWG) in the summer of 1968. At the outset. using an ARPAnet-specific “host-to-host protocol” that was referred to as the Network Control Program (NCP). and the IMPs communicated with each other over 56Kb/sec. Government agencies to 6 7 Dubbed “1822. Copyright © 2005 Interisle Consulting Group.
2. ARPA. 8 The U. www.ISP Peering and Interconnection Page 7 develop similar networks8. The prevalence of highly restrictive AUPs provided little incentive for the networks to interconnect. DoE's High Energy Physicists responded by building HEPNet. disgruntled computer scientists9 who could not connect to one of the government-controlled networks established CSNET for the (academic and industrial) computer science community. these early networks were restricted to closed communities defined by an “acceptable use policy” (AUP) that specified the uses to which the networks could legitimately be put (e. based on the Unix UUCP communication protocols. LLC. AT&T’s wide dissemination of the Unix operating system encouraged the creation of USENET.3. and in 1981 Ira Fuchs and Greydon Freeman developed BITNET. CA (FIX-West).. These interconnection points were managed by two informal groups of engineers and managers. The interconnection regime was designed primarily to isolate the regions within the emerging technologically uniform IP “internet” that were subject to different acceptable use policies. DoE.interisle. Eventually. 9 Led by Rick Adrion. With the exception of BITNET and USENET. and Larry Landweber. NASA Space Physicists followed with SPAN. David Farber. All Rights Reserved .net Copyright © 2005 Interisle Consulting Group. to conduct research funded by a particular government agency). which linked academic mainframe computers. and NSF: the Federal Internet Exchanges at the University of Maryland (FIX-East) and NASA’s Ames Research Center in Mountain View.S. Department of Energy (DoE) built MFENet for its researchers in Magnetic Fusion Energy.g. the Federal Networking Council (for administrative matters) and the Federal Engineering Planning Group (for technical matters).1 Federal Internet Exchanges The practical awkwardness of operating multiple non-communicating networks eventually led to the establishment of two exchange points for federally-funded networks operated by NASA. and initially they did not.
which was created in 198110 under a grant from the National Science Foundation .net . All Rights Reserved www. BITNET. the bureaucratic complexity of which daunted even the most fervent advocates of interconnection—until the CSNet managers came up with the idea that we now call “peering. This disconnect persisted as both sides assumed that any agreement to exchange traffic would necessarily involve the settlement of administrative. The purpose of CSNET was to link all of the computer science departments and industry labs engaged in computing research. Anthony Hearn (Rand Corporation). Copyright © 2005 Interisle Consulting Group. and the X. The development of CSNet highlighted the disconnect between the “haves” and the “have nots” in the computing research community—between those who could find a government agency or contractor to sponsor their connection to the ARPAnet. The turning point that eventually brought them all together was the CSNET project. and a host of other issues. 10 by Larry Landweber (University of Wisconsin).25 networks could not be connected to the ARPAnet (or to the other federal networks that were interconnected at the FIXes) because of the government policy limiting ARPAnet to government agencies and their contractors. financial. BITNET. because no mechanism existed to reconcile the different Acceptable Use Policies of the two networks. It provided TCP/IP interfaces with USENET. as long as no commercial traffic flowed through ARPAnet.2 CSNet and NSFnet The USENET. contractual. This agreement was the turning point at which the evolution of commercial network interconnection began. and Peter Denning (Purdue University). and established nameserver databases to enable any computing researcher to locate any other.interisle.ISP Peering and Interconnection Page 8 2.3.25 networks.” or interconnection without explicit accounting or settlement. and those who could not (connecting instead to CSNet). LLC. we would say that the customers of one ISP (ARPAnet) could not communicate with the customers of another ISP (CSNet). and commercial X. In modern terms. A landmark agreement between NSF and ARPA allowed NSF grantees and affiliated industry research labs access to ARPAnet. David Farber (University of Delaware).
These NAPs were the first commercial Internet exchange points. NSF handed over its management to commercial Internet Service Providers (ISPs).3.ISP Peering and Interconnection Page 9 NSF went on to sponsor NSFnet.4 Commercial Internet Exchange Points As the number and diversity of NAPs increased. Hans-Werner Braun. operated by Sprint. LLC.net Copyright © 2005 Interisle Consulting Group. using published pricing and established technical operating specifications. as the National Science Foundation began the transition to private ownership and management of the NSFnet infrastructure. which extended the commercial Internet exchange model yet further.interisle. All Rights Reserved . By 1990. and in 1996. 2. Bob Aiken. and MFS.where any interested party could co-locate equipment and connect its network to the NFSnet backbone or to other networks. and Steve Wolff. 2. privately owned and operated Network Access Points (NAPs). or MAEs) became increasingly congested.>> As the original NAPs (also referred to as Metropolitan Area Exchanges. NSF also commissioned the development11 of a deliberate architecture of backbones and regional networks that introduced the idea of hierarchy into the Internet topology.3. <<CIX in San Diego was the first to engineer the interconnection at the IP layer. the NSFnet had become the backbone of the modern Internet. the potential complexity of hundreds or thousands of ad-hoc bilateral arrangements pointed to the need for 11 By Peter Ford. a high-speed backbone connecting its supercomputing research centers. Ameritech. using routers.3 Network Access Points In 1993. it established four geographically distributed. Pacific Bell. a NAP operator was required to provide and operate an interconnection facility on a nondiscriminatory basis. Under the terms established by the NFS. many network providers began creating their own private NAPs. www.
It was at this juncture that there began to emerge a large number of privately operated NAPs. a. Some providers were vertically integrated. The Copyright © 2005 Interisle Consulting Group. but the opportunity to achieve better performance.interisle. NAPs.k. interconnection. led many ISPs to explore direct interconnection of their networks with those of other ISPs. LLC. in turn. scopes.5 Internet Service Providers If exchange points. to interconnect in ways appropriate to each.net .ISP Peering and Interconnection Page 10 an overarching.3. Internet Service Providers. 2. or ISPs. End users connected to ISPs by placing calls over the public telephone network to modem banks operated by the ISPs. ”exchange points. or via leased circuits of higher capacity. and operating philosophies. connected to regional or backbone networks at NAPs or exchange points. All Rights Reserved www. operational support of routing equipment. neutral policy framework within which providers could implement mutually beneficial cost-sharing interconnection agreements. ISPs. traffic routing based on sophisticated criteria. and clearing and settlement of charges between parties). however. were the retailers. These exchanges provided a framework that allowed multiple providers of different sizes. This interconnection hierarchy did not. Any ISP could connect to one of the public Internet exchange points. The economic incentives and tradeoffs that are so richly diverse in today’s Internet (see section 3. and backbone providers were the wholesalers of the emerging commercial Internet. serving the same or different markets.2) began to develop as soon as commercial ISPs recognized that their interconnection arrangements could be a source of competitive advantage.g.” which provided a uniform set of technical and administrative services (e. operating in every business from high-capacity backbone traffic down to dial-up lines. ISPs served end users by providing connectivity between them and the rest of the Internet. billing. traffic metering. Others specialized in providing one form or another of connectivity to one or more specific markets. correspond to a strict hierarchy of ISPs and backbone providers as business entities. particularly for destinations that would be several “hops” away using a public exchange.a.
S. Because North American Internet users were overwhelmingly the sources. LLC. completely unfounded.6 Internet Exchange Points outside of North America Because the Internet developed earlier. the cost of connecting through an exchange point on the east coast of the U.ISP Peering and Interconnection Page 11 growing number of ISPs. the interconnection arrangements between North American ISPs and networks in other countries initially were biased strongly in favor of the North American ISPs. rather than the consumers. for example. which meant that even where a link existed between. Germany and France. A corollary to many of these studies is the observation that the selfhealing properties of the Internet architecture guarantee that the Internet as a whole will remain fully interconnected even if most of the direct connections between individual ISPs were removed. whether or not any particular pair of ISPs installed an explicit public or private interconnection. 13 With the notable exception of the UK. see.3. could be an order of magnitude lower than the cost of a direct connection . and more rapidly. Until relatively recently.interisle. it was common for Internet users in Taiwan. in today’s Internet. of 12 The topology of Internet interconnection has emerged over the past decade as an important factor in studies of Internet resilience and survivability. Malecki’s “The Economic Geography of the Internet’s Infrastructure” (Sources and References). Copyright © 2005 Interisle Consulting Group. This imbalance arose both from the early absence of an exchange infrastructure in other parts of the world.net . The fear of Internet “balkanization” as a result of large ISPs refusing to interconnect with smaller ISPs is. for example.12 2. for example. ensured that the Internet as a whole would always be fully interconnected. with the Asian network operators paying the full cost of the trans-Pacific links. All Rights Reserved www. the customers of every ISP could communicate with the customers of every other ISP. to communicate with other Internet users in Japan or Singapore over a path that led through an exchange point in California (MAE-West). and from the much more favorable (largely unregulated) economics of Internet telecommunications in North America than in most other countries. and the variety of different ways in which the rapidly expanding Internet services market drove the development of creative combinations of public and private ISP interconnection. Edward J. which was connected to the ARPAnet much earlier than any other non-North American country. in North America than in other parts of the world13.
administrative. 60 of the 92 listed exchanges are located outside of North America. ISPs in non-North American countries were determined to correct this imbalance by forcing North American ISPs to subsidize the cost of inter-regional links. multi-ISP attack that have yet to be seen). that semantically span multiple ISPs. 3 Interconnection in Today’s Internet The fabric of today’s Internet is stitched together from a huge variety of links and individual networks.peeringdb. special-purpose and generalist. 3) detection of and response to denial of service attacks (and possibly other forms of distributed.ISP Peering and Interconnection Page 12 Internet content. However. at the time of this report. As recently as five years ago. ISP interconnection. involves a number of issues that go beyond simply splicing together traffic streams. operational. particularly “quality of service” (QoS) dependent services. LLC. from a technical.net . Copyright © 2005 Interisle Consulting Group.interisle. and legal perspective. Market forces now drive ISP interconnection decisions in many other countries as effectively as they do in North America. 14 A current list of Internet exchange points is maintained at https://www. Interconnection is goverened by a wide variety of bilateral and multi-party arrangements. as dozens of viable regional Internet exchanges have emerged outside of North America14. they had very little incentive to defray the cost of connections to other countries. the pressure to regulate international ISP interconnection in favor of non-North American ISPs has substantially evaporated. All Rights Reserved www. 2) the provision of services. ranging from individual home users’ dial-up connections to globe-spanning networks of massive capacity. all of which require cooperation and collaboration among multiple ISPs: 1) secure exchange of interdomain routing information.php. large and small. financial. owned and operated by a literally uncountable array of providers: private and public. local and global.com/private/exchange_list.
net .1 Interconnection Architecture 3.g.. the recent IETF proposal). self-regulating groups that have proved. and • other forms of governance (e. All Rights Reserved www.1. phishing.g. and continued Copyright © 2005 Interisle Consulting Group. and 5) enforcement of national public policy mandates (universal service. The differences are observable both in the basic architecture of interconnection—the decentralized and self-organizing “Internet approach” to packet switching vs. What has given vitality to the Internet approach isn’t simply that the current approach meets the needs of the current environment. in the more familiar public switched telephone network (PSTN). and other intrinsically multi-ISP exploits.g. their ability to create and maintain technical. the centralized and heavily-managed PSTN circuit switching—and in the policies and economics that govern interconnection arrangements. other architectures (e. wiretap. business. LLC. adaptive.. x. emergency warning (cf.25. point-to-point leased circuits. frame relay). monolithic. regulated monopolies or governmentowned PTTs).ISP Peering and Interconnection Page 13 4) control of spam. SNA). and governance policies and practices that encourage high-quality engineering. The Internet approach is driven by self-organizing. ISP interconnection operates very differently in the Internet than its counterpart does. for example. broad interoperability. and compelling. architectural.interisle. it is that the current approach relies on underlying processes that are flexible. other business models (e. etc.1 The Internet Approach What can loosely be termed “the Internet approach” has become the dominant paradigm in networking. 3. time and again. The Internet approach has displaced: • • • other technologies (e. end-to-end ownership of the transport infrastructure by a single provider).).g.
It is the principal body engaged in the development of new Internet standard specifications. while truly representing global consensus and thereby keeping participants on board. members of the former NFSNET “Regional-techs” meeting formed an expanded group. Copyright © 2005 Interisle Consulting Group. operations. administratively. and public policy. operation. self-regulating structure. but is not a corporation and has no board of directors.1.1 Technical Standards Internet technical standards are developed through the activities of the Internet Engineering Task Force (IETF).ISP Peering and Interconnection Page 14 creation of value.1. the operators of interconnected networks have met both informally and formally to share technical information and coordinate operating principles and practices. Almost every aspect of Internet technical development. called the “North American Network Operators Group” (NANOG). to be effective at establishing workable standards and highly adaptive to the rapid growth and change that have occurred within the Internet. within the Internet Society. and this fact has often been cited as the key to the Internet’s phenomenal success. over a 20 year history.1. Selfregulation has allowed the Internet to adapt quickly and efficiently to the rapid pace of change and innovation in telecommunications technology. coordinated by the Internet Architecture Board (IAB) and housed. In the 1990s. 3. The IETF is unusual in that it exists as a collection of happenings.”15 The “loosely self-organized” IETF and related organizations have proven. and no dues. with a charter to promote and coordinate the interconnection of networks within North America 15 Tao of the IETF—A Novice's Guide to the Internet Engineering Task Force. no members.net .2 Operating Principles and Practices Since the earliest days of the Internet. All Rights Reserved www. LLC. 3. (see Sources and References).interisle.1. and governance is managed by a self-organized. The IETF is: “…a loosely self-organized group of people who contribute to the engineering and evolution of Internet technologies.
testifies to the success of the self-regulating NANOG model. Domain names. Copyright © 2005 Interisle Consulting Group. with the technical infrastructure required to cause the names to perform their intended function.interisle. regardless of the ISP to which they happen to be locally connected.ISP Peering and Interconnection Page 15 and to other continents. such as “coca-cola. In the Internet. serving as an operational forum for the coordination and dissemination of technical information related to backbone and enterprise networking technologies and operational practices.1. including: • • • • • • • AfNOG—the African Network Operators Group SwiNOG—the Swiss Network Operators Group JANOG—the JApan Network Operators Group FRnOG—the FRench Network Operators Group NZNOG—the New Zealand Network Operators Group SANOG—the South Asian Network Operators Group PACNOG—the Pacific Network Operators Group 3.3 Resource Allocation One of the most important governance functions in any domain is promoting an efficient exchange of value and allocation of resources. constitute one highly visible class of valuable virtual resource in the Internet. Another measure of the effectiveness of NANOG is that other regions of the world have replicated the approach and have developed or are developing similar groups. All Rights Reserved www. NANOG has been highly effective in allowing ISPs and backbone providers to coordinate their activities to efficiently provide seamless service to a broad market. or “lightbulbs. and virtual resources.com”. trademarks and service marks). The fact that North American Internet users enjoy transparent access to the entire Internet. tangible infrastructure such as communications links and switching facilities. Domain names combine aspects of traditional intellectual property (i. LLC.net .1.com”.e. there are two key types of resources in play: Physical.
the Internet Corporation for Assigned Names and Numbers. LLC. to promoting competition.” 3. an Internet exchange point is a physical place (typically a room in a building) in which Internet routers Copyright © 2005 Interisle Consulting Group. From its own description: “As a private-public partnership.2 Interconnection Arrangements From a purely technical standpoint—that is. an essential function for the proper operation of most Internet services.net . the numerical address by which each computer connected to the Internet is uniquely addressable. is an international. there are only a fixed number of addresses available. but there still needs to be a mechanism for allocating the addresses. Under any addressing scheme. to achieving broad representation of global Internet communities. and to developing policy appropriate to its mission through bottom-up. ICANN.ISP Peering and Interconnection Page 16 Another important virtual resource is the IP Address.interisle.1. consensus-based processes. ICANN is dedicated to preserving the operational stability of the Internet. marketdriven process • • The allocation of IP addresses The operation of the mechanism (also highly decentralized) whereby names are resolved to addresses. unencumbered by policy or economics—ISP interconnection is no more complicated (or controversial) than simple internetworking. the IETF can establish an addressing scheme (and has done so). in which routers connected by communication links of various kinds compute routes through the Internet based on information they have received from hosts (end users) on any networks to which they are directly connected and from other routers. through a highly decentralized. All Rights Reserved www. broadly participatory organization responsible for overseeing: • The allocation of domain names. the operators groups can establish a plan for deploying it. In its simplest form.
and decide to use the exchange point to reach those users.interisle. Traffic from users on A’s network to users on B’s network would flow over A’s network as far as the exchange point. ISPs that want to use the exchange point to connect to other ISPs run one or more links from their own routers to the exchange point.net .16 A similar arrangement obtains when two ISPs decide to connect their networks directly to each other. but this is not the classic “holdup” scenario that can arise from simple refusal to interconnect in the PSTN world. if an ISP’s link to one exchange point (or the exchange point itself) fails.ISP Peering and Interconnection Page 17 are installed. 17 Some ISPs will refuse to carry traffic that originated with another ISP that has been “blacklisted” for sponsoring spam or phishing attacks. The ISP routers and the exchange point routers exchange information about where different groups of Internet hosts—identified by their IP addresses—are located. or to a direct connection to another ISP. this process is much less dynamic (and much less robust) in the PSTN. where call re-routing depends on the prior negotiation and provisioning not only of alternative circuits but also of switch ports and switching fabric capacity. using routing protocols such as the Border Gateway Protocol (BGP). Copyright © 2005 Interisle Consulting Group. the way in which traffic flows are managed at exchange points is much more complicated than in this example. In today’s richly-interconnected Internet. and connect them to the exchange point routers. the possibility that an ISP could find itself unable to connect its customers to some part of the Internet because one or even many other ISPs refused to interconnect with it17 is vanishingly small. In the Internet. of course. it can quickly re-route traffic through some other exchange point. and then over B’s network. LLC. When multiple carriers are involved. for example. without loss of data or manual re-configuration. All Rights Reserved www. rather than at a third-party exchange point. there 16 In practice. that a group of Internet users who are customers of ISP B can be reached through an exchange point to which both A and B are connected. ISP A might learn. The most important difference between this model of Internet interconnection and the circuit-switching model of the PSTN is that the Internet dynamically selforganizes to find paths from one point to another without explicit preconfiguration or setup.
net .2 Interconnection Policy and Economics Interconnection policy refers to the way in which the technical and contractual arrangements that ISPs negotiate with each other to interconnect directly or at public or private peering points (Internet exchanges) are influenced by (a) the business objectives and policies of each of the parties.1 Interconnection Agreements At its most basic.net/network/peeringpolicy. 18 Representative examples of large. or (third example).” Interconnection agreements are often tailored very carefully and minutely to the specific circumstances of the parties involved.interisle.mci. Interconnection economics refers to the way in which interconnecting ISPs assess and manipulate the economic variables that determine the viability of interconnection as a business proposition. 3. and the architecture of the Internet ensures that traffic will flow end-to-end regardless of where an ISP is connected. or pay you. and other public policy instruments that apply to the jurisdiction in which the interconnection takes place. and small networks’ peering policies are the MCI UUNet policy (at <http://global.php>). All Rights Reserved www. the Speakeasy policy (at <http://www. and (b) external mandates arising from laws. the fact that they have become increasingly public speaks to an increasingly transparent. While it was once the case that networks were quite private about their peering policies. medium.speakeasy. Copyright © 2005 Interisle Consulting Group. increasingly the market has become one in which networks publish their policies openly18. or some combination of the two.com/uunet/peering/>).2. LLC.ISP Peering and Interconnection Page 18 are simply too many available connection points. an interconnection agreement says “You carry some traffic for me. participatory market. public and private. Aside from the publicly available policies providing a useful look into the economics of peering. in return for which I’ll do something—either carry traffic for you. 3. particularly when those parties are large ISPs. regulations.
An operator connects to an exchange.interisle. One operator. accepts traffic originating within the other’s network. Two operators interconnect. possibly through a thirdparty exchange point or other intermediary. destined not only for its own customers but for third party networks with whom the provider in turn connects. public and private—connect to each others’ networks under a variety of arrangements. the operator settles through the exchange for traffic that others carry on its behalf and that it carries on behalf of others. traffic is routed to other operators’ networks via equipment provided by the exchange and according to rules administered by the exchange. LLC. and/or for the customers of other networks to which it is in turn connected (transit). Each charges for the volume of traffic it accepts from the other. the net settlement amount would be zero) 2) Sender Keep All. There. 4) Multilateral exchanges. which adhere to one of four basic models: 1) Bilateral settlements.ISP Peering and Interconnection Page 19 The current environment is one in which a heterogeneous mix of network providers—large and small. Each accepts traffic destined for its own customers and originating within the other’s network. As with bilateral settlements. When all the different network interconnection arrangements are considered. 3) Transit. a (usually commercial) facility carrying connections from multiple operators.net . Neither network delivers traffic to third parties on behalf of the other. for delivery to the accepting network’s customers. and global. ( It follows that if the value of traffic in both directions is equal. national. The provider charges a fee for carrying the other network’s traffic. local. it is possible to consider them all as variations on a common theme (see Table 1) : • Networks “A” and “B” connect to each other. All Rights Reserved www. But no charge is made. two operators each accept traffic from the other. Copyright © 2005 Interisle Consulting Group. • Each accepts traffic destined for its own customers (peering). the provider.
net . publicly-advertised factors include: • Geographic coverage of the two networks: either overlapping. and in the case of a paid arrangement (bilateral settlement or transit). Copyright © 2005 Interisle Consulting Group.2. All Rights Reserved www. • The arrangement is either purely bilateral. such that a peering relationship would be symmetrical. such that a peering relationship would extend each network’s geographic reach. • Technical factors: networks may require certain technical standards. 3. the pricing19 External.2 Micro-economics of Interconnection Many economic and business-policy factors affect an individual ISP’s decision to peer or not to peer with another ISP. “A” accepts traffic for: Its own customers only Other networks to whom it connects “B” accepts traffic for: Its own customers only Other networks to whom it connects Other Financial settlement None Cash Through an Exchange Multi-Party Networks connect: Directly Nature of Agreement Bilateral Table 1: Any given interconnection arrangement can be characterized by choosing one value from each of the columns above. or it is a multi-party agreement. or preferentially choose interconnection partners where the peering relationship gives access to a desired technology. 19 Two recent studies of peering economics are reported in Economics of Peering and A Business Case for Peering in 2004 (see Sources and References). or it doesn’t. LLC. possibly through a third party intermediary). or non-overlapping.ISP Peering and Interconnection Page 20 • The arrangement either includes a cash payment made by one network to the other (again.interisle.
At a theoretical level. Routing: networks may require specific routing policies and practices. if one network’s specific geography or customer mix or traffic mix dovetails with an important element of the other network’s strategy. for example.interisle. for example).net . or access to a large user community. the implicit assumption that the cost of a link. idiosyncratic factors apply. the arrangement is made on the basis of a perceived equitable exchange of value between the two interconnecting parties. In some cases. where the value of the arrangement to each of the parties is determined by a number of factors.ISP Peering and Interconnection Page 21 • • • • Operational: networks may require a certain level of operational support. it is extremely difficult to analyze the economics of any particular interconnection arrangement using external. LLC. The argument has been made in the past. others entirely idiosyncratic . Anticipated traffic volumes. it would lead to a higher perceived value and price than otherwise. cost-effective transit. bearing the cost in effect of two transatlantic hops. Additional. Two arguments against intervention apply here: one addresses the argument itself and the other examines historical outcomes. where as the origination of traffic was split more evenly between the two. In any given case. For example. should be borne by the two connected parties in proportion to the volume of traffic they Copyright © 2005 Interisle Consulting Group. European ISPs in one country were connecting to US backbones in order to send traffic back to a neighboring European country. All Rights Reserved www. in a perfectly fair market. that certain bilateral relationships between overseas and US-based networks are “unfair” on the grounds that the cost of the transatlantic or transpacific link was borne entirely by the overseas network. Size: networks may choose to peer only with similarly sized networks. objective criteria in order to determine whether or not the market is distorted and the agreement gives either party undue advantage. some obvious (direct cash payment. Because so many idiosyncratic factors affect each interconnection decision.
“>> Copyright © 2005 Interisle Consulting Group.3 Macro-Economics of Interconnection In addition to examining the factors influencing a single interconnection arrangement.net . does not mean that X’s customers will be unable to reach Y’s customers: X always has the option of buying transit from some third party who is in turn connected to Y. and not regulatory intervention. it has been observed that the European networks now connect to each other at multiple exchange points within Europe. that influence the value of interconnection to either party. and that anything else is perforce distored. On a more pragmatic level. Models of interconnection economics have been developed by <<citations. as contrasted with the circuit-switched.ISP Peering and Interconnection Page 22 originate. it is worth examining the overall characteristics of the market in which these arrangements happen. connectionless architecture. Does a buyer or a seller have a choice of many parties to deal with? Or is there a monopoly or oligopoly limiting choice? In some sense.2. LLC. 3.interisle. including “Internet interconnection and the off-netcost pricing principle”: “The purpose of this article is to develop a framework for modeling the competition among interconnected Internet “backbone operators” or “networks. financial desire to avoid paying transatlantic round-trips to connect to one’s neighbor. the overall economic environment in which interconnection agreements are negotiated can be characterized as a free market with a large number of players. All Rights Reserved www. (Y has a strong incentive not to make the terms of interconnection too onerous for at least some well-connected peers. is flawed due to the additional factors other than traffic volume. It was the rational. connection-oriented public telephone networks. Just because ISP “X” can’t strike a satisfactory bargain with ISP “Y”. at risk of cutting its customers off from regions of the Internet) In addition to the intrinsic choice. An essential characterization of a market is its liquidity. discussed above. choice is intrinsic to the Internet’s routed. that led to the emergence of this more effective network topology.
All Rights Reserved www. it is important to understand what might be the symptoms.ISP Peering and Interconnection Page 23 It has been suggested that the free market operation of ISP interconnection would be threatened by consolidation and the emergence of a small number of dominant players. resulting in the usual effects of reduced competition: higher prices overall. been considerable consolidation in the ISP market. or signatures of a distorted. as well as a review of specific products and their price points. Copyright © 2005 Interisle Consulting Group. it is not clear that just because the cash economics of given a peering arrangement do not track the data transport volumes. Equinix. or other obvious criteria. implies market distortion. network performance and business expansion.”20 It is worth following these predictions to determine their accuracy and applicability. a slower pace of innovation. This presentation will review pricing trends and the opportunities that are being created for small and regional networks. who would be able to form in effect a cartel and disadvantage their competitors. it has been claimed that the barriers to entry in the backbone business have been lowered. 20 Jay Adelson. geographic footprints.interisle.net . There has. oligopolistic or monopolistic market. tracking the number of backbone operators and the entry barriers to the backbone business is likely to provide insight into the dynamics of the market. Session announcement. On the other hand. 2005 ISPCON conference. and damage to the end consumer. LLC. The presentation will be technical and geared toward an engineering audience. Given the idiosyncratic nature of peering decisions. fewer choices. uncompetitive. founder and CTO. Is it hurting the market? In assessing this question. for example: “Trends in transport pricing over the past six months have created a disruptive change by lowering the barriers for small and regional networks to develop robust national backbones for application delivery. It will draw upon specific examples and case studies of ISPs that have leveraged this trend. Recently. in fact. peering.
and represent a significant and potentially distorting force. LLC. Because the architecture of the Internet is application-insensitive.net . relating to external attempts to bypass the selforganizing aspects of the Internet approach and impose poicy. 4. In the Internet. and at the IP layer a VoIP packet is indistinguishable from any other data packet. In the PSTN. does not observe the same functional layering as do IP networks. In November 2003. as it has to other challenges and changes over the past decades.1 Multi-Layer Interconnection Arrangements Today: interoperability and interconnection at the packet level (architecture—the Internet hourglass model). attention has been focused on interoperability at the application layer—VoIP in particular. All Rights Reserved www. The first three challenges described below are well within the scope of the “Internet approach”: the existing policy mechanisms are well equipped to adapt to these changes. interoperability between the Internet and the PSTN is freighted with serious difficulties. The fourth. This was the focus of NRIC V Focus Group 4. are in many senses orthogonal to the operation of the Internet itself. and the architecture of the PSTN is highly application-sensitive. as they have to equally disruptive challenges and changes in the past.” Copyright © 2005 Interisle Consulting Group.ISP Peering and Interconnection Page 24 4 New Challenges The Internet approach to interconnection faces several new challenges.interisle. which has traditionally been the vehicle for global voice telecommunications. the final report of NRIC VI Focus Group 3 dealt with VoIP: “The recommendations and best practices included in this report address the interoperability of Voice over Internet Protocol (VoIP) and the Public Switched Telephone Network (PSTN). In 2000 the final report of NRIC V Focus Group 4 (see Sources and References). voice is both the application and the driver for the architecture of every other part of the system. dealt with ISP interconnection at the level of packet exchange—how IP packets are conveyed across the boundary (physical and administrative) between different ISPs. This comes about in part because the PSTN. for example. More recently. which will force it to adapt. voice is just another application.
national governments).4 Government Intervention Government attempts to control various aspects of the Internet (ITU. interconnection arrangements are likely to involve multiple layers of the Internet architecture. 26). LLC. operating practices and policies. In every arena: technical standards. it may start to look like a tool for the achievement of public policy objectives (for example. operating practices. which concluded at the time that balkanization was not likely to occur because of other forces. and others. resource allocation. universal standard of coverage. As the Internet becomes more of a core enabler of human activities.3 Traffic-Load Sensitive Peering Agreements Today: peering agreements are almost uniformly traffic-load insensitive. addressing the “Digital Divide” at a national or global level. and the overall market. Possible emergence of a traffic-sensitive settlement system as ISPs in different situations try to deal economically with the asymmetry inherent in WWW. resulting in a network infrastructure that does not provide a uniform.2 Balkanization Potential for balkanization of the Internet as backbone ISPs try to differentiate themselves (competitively) by offering services only to their own customers. 5 Conclusions Today's Internet is the way it is because of the way it developed. All Rights Reserved www. This will affect technical standards. the economic decisions surrounding a provider’s decision to interconnect.interisle.net .ISP Peering and Interconnection Page 25 With the rise of VoIP and QoS-dependent applications. policy is established by self-organized. This was anticipated by studies conducted in the late 1990s. operating with a high degree of transparency. Copyright © 2005 Interisle Consulting Group. 4. the terms of interconnection agreements. 4. and representing a broad constituency. (see OPP WP 32 pg. inclusive organizations. 4. or controlling trans-border data flows).
If the policy making organizations didn't respond to that imperative. decentralized nature of the Internet. self-regulating aspects of the Internet are thriving.fcc.fcc. FCC Office of Plans and Policy Working Paper No.gov/Bureaus/OPP/working_papers/oppwp31. top-down attempts to regulate. 34.fcc. FCC Office of Plans and Policy Working Paper No.gov/Bureaus/OPP/working_papers/oppwp32.gov/Bureaus/OPP/working_papers/oppwp34. and run the risk of being destabilizing and harmful. 33. FCC Office of Plans and Policy Working Paper No. the participants wouldn't follow. September 2000. Atkinson and Christopher C. 32. given the inherently decentralized native architecture of the Internet and the heterogeneous.pdf Bill and Keep at the Central Office As the Efficient Interconnection Regime. which is an important source of the Internet's vitality. Regulatory policy-makers should remain attuned to the possibility that future developments would lead to a less competitive environment. the self-organized. LLC. http://www.interisle.ISP Peering and Interconnection Page 26 This approach is nearly inevitable. global market in which the Internet operates. December 2000. Jason Oxman. and watch for the signatures of a distorted market. Patrick DeGraba.pdf Copyright © 2005 Interisle Consulting Group. The incentives are well aligned: due to the network effect. either in the service of "improving" the Internet itself.net . On the other hand. no matter how well intentioned or carefully crafted. December 2000. and the policy makers would lose their mandate. to redress perceived inequalities in access or pricing. July 1999.pdf A Competitively Neutral Approach to Network Interconnection. or in furtherance of orthogonal policy objectives (solving the “digital divide” problem.gov/Bureaus/OPP/working_papers/oppwp33. All Rights Reserved www. for example).pdf The Digital Handshake: Connecting Internet Backbones.fcc. Barnekov. should refrain from action. http://www. http://www. which creates a strong bias toward policies that facilitate growth and efficiency. Michael Kende. 6 Sources and References The FCC and the Unregulation of the Internet. but until such problems present themselves. http://www. continued growth of the Internet is a rising tide that lifts all boats. At present. FCC Office of Plans and Policy Working Paper No. Jay M. 31. are contrary to the fundamental.
370–390. FCC Network Reliability and Interoperability Council.xchangepoint.net/resources/papers/asia-pac-ix-update/asia-pac-ixupdate-v11.student. Rajiv Dewan. February 2005. <http://www. and Pavan Gundepudi. Paul Milgrom.equinix. Internet interconnection and the off-net-cost pricing principle.internet peering.pdf> The ISP Survival Guide: Strategies for Running a Competitive ISP. William B.org/pubs/nric5/2B4appendixb.com/peering/downloads/A Business Case for Peering in 2004.pdf> Economic Trends in Internet Exchanges. September 2004.pch. Reprinted from The Internet Upheaval.edu/graphics/vol3/vol3_art8.com/pdf/whitepapers/PeeringEcosystem.ISP Peering and Interconnection Page 27 Evolution of Internet Infrastructure in the Twenty-First Century: The Role of Private Interconnection Agreements.nric. William B. 14 September 2004. Presentation to “Gigabit Peering Forum IX. Cambridge: MIT Press (2000): 175-195.pdf> Economics of Peering. Internet Peering Ecosystem. < http://www. Appendix B: Service Provider Interconnection for Internet Protocol Best Effort Service.pdf> Copyright © 2005 Interisle Consulting Group. <http://vjolt.” New York City.interisle.equinix. Peering and Financial Settlements in the Internet. Summer 2003 pp. <http://www. FCC Network Reliability and Interoperability Council.org/pubs/nric5/2B3finalreport. 1998.S. RAND Journal of Economics Vol. Virginia Journal of Law and Technology. Steve Gibbard.htm > Without Public Peer: The Potential Regulatory and Universal Service Consequences of Internet Balkanization.edu/~milgrom/publishedarticles/TPRC 1999. Norton. May 2002. William B. <https://ecc. 1998. 3 February 2005. Interconnection. Norton. All Rights Reserved www. 2.pdf> A Business Case for Peering in 2004.pdf> The Art of Peering—The Peering Playbook. 2000. October 1999.isoc. <http://www. Bill Woodcock.net/info/wp20020625. and Padmanabhan Srinagesh. September 2000.org/inet99/proceedings/1e/1e_1. Jean-Jacques Laffont. LLC. Geoff Huston.net . <http://www. <http://www. <http://www.doc> NRIC VI Focus Group 3 Final Report. Patrick Rey. Presentation at the 1999 Internet Society Conference (INET 99). Norton. Rob Frieden.pch.html> The Evolution of the U. Wiley Computer Publishing. November 2003. Geoff Huston. 34.ppt> Competitive Effects of Internet Peering Policies.net/documents/papers/Gibbard-peering-economics. NRIC V Focus Group 4 Final Report. June 1999.stanford. University of Rochester. Ingo Vogelsang and Benjamin Compaine (eds). <http://www. No. April 2005.virginia. Marshall Friemer.nric. Presentation to NZNOG 2005 conference. Scott Marcus. Fall 1998. November 2003. and Jean Tirole. Bridger Mitchell.
ietf. Timothy Denton. All Rights Reserved www. Bailey (eds. MIT Press. 1997. May 1999.clarku. Edward J. October 2002. < http://www.com/pub/bellheads. Lee W. Malecki. McKnight and Joseph P.interisle.).ISP Peering and Interconnection Page 28 Internet Economics. <http://www.html> Copyright © 2005 Interisle Consulting Group. Susan Harris and Paul Hoffman.net . LLC. Netheads vs. Bellheads: Research into Emerging Policy Issues in the Development and Deployment of Internet Protocols.tmdenton.edu/econgeography/2002_04. <http://edu.org/tao> The Economic Geography of the Internet’s Infrastructure. October 2004.pdf> Tao of the IETF—A Novice's Guide to the Internet Engineering Task Force.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.